Swing Trade Idea (DPZ) – September 13, 2022
Our bearish trade for Tuesday, September 13th is Domino’s Pizza Inc. (DPZ). DPZ is part of the Consumer Discretionary Sector, which performed at 0.27% over the last month, with DPZ underperforming relative to its sector at -9.82% over the same period.
DPZ formed a double top at $415 resistance, followed by a retracement lower. As it failed to break above the 21 Day EMA and is aiming lower, we expect further downside with the next major support at $325. This provides a good risk/reward bearish entry.
As a close, if DPZ were to trade above $380 for multiple days, this would invalidate our analysis and would consider cutting losses on the trade. We also will consider cutting losses on this options trade if the value of the vertical spread moves below $6.23.
